If you set this option to true, TinyMCE will force BR elements on newlines instead of inserting paragraphs. This option is set to false by default since paragraphs is a much better concept. You can style P elements to be one row by adding p { margin: 0; padding: 0; } to your CSS, P tags where invented for a reason and should be used. BR elements should only be used when you really have to (mostly never).
Example of usage of the force_br_newlines option:
tinyMCE.init({
...
force_br_newlines : true
});